Another lawsuit emerged for electric vehicle giant Tesla (TSLA), and once again, it is a matter of door locks. This time, Tesla is taking on another lawsuit that stemmed from a fiery car crash, and the fact that the person in the car could not get out due to Tesla door handles. Despite the severity of the news, Tesla investors piled in behind Tesla in a big way, and sent Tesla shares up over 7% in Monday afternoon’s trading.
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The crash happened almost three years ago, back in January 2023, but the lawsuit stemming from that crash is freshly filed. Jeffery and Wendy Dennis, out running errands on a Sunday afternoon, found their car—a Tesla Model 3—suddenly accelerating without prompting. The Tesla then accelerated into a utility pole, and as you might expect, catastrophically failed, bursting into flames.
Numerous bystanders tried to pull Jeffery and Wendy from the wreckage, but ran into a problem: Tesla’s door handles would not actually operate. That left Jeffery seriously wounded, and Wendy dead. The lawsuit, meanwhile, alleges that Tesla knew that the door handles could be basically shut down by a crash—despite the fact that Teslas have two battery systems, including one that handles “interior functions” like door locks—and that a serious crash can render the doors inoperable.
Lease Renegotiations
Meanwhile, Tesla’s attempt to get a factory up and running in Buffalo, New York is proving a source of problems once more. Tesla nearly had a deal established with Empire State Development, but when Tesla pivoted on some of its artificial intelligence (AI) strategy, the deal found itself under strain.
Originally, Tesla was set to bring a supercomputer known as Dojo to New York. But Dojo found itself shut down, and Cortex became the new way of the future. The problems is that Cortex is focusing on Austin, Texas, which leaves New York in the lurch and questioning how much of a future it wants to have with Tesla.
Is Tesla a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 10 Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. After a 15.51% rally in its share price over the past year, the average TSLA price target of $383.37 per share implies 8.49% downside risk.
